$100K incomes + organic hemp for CBD: a“fat pig” is born January 6, 2020 – Posted in: Blog
In 2014 John Long and Bill Althouse independently reached out by phone and email to all 100+ Colorado certified organic farmers about the opportunity to grow hemp, using the USDA Organic Integrity online database. They met with resistance. Nobody was willing to try growing hemp due fears about hemp being illegal.
Bill is a long time hemp grower and expert farmer, and an engineering visionary. He decided he would produce, with the help of his team, a completely vertically integrated, on-site value added production model, from Bill’s custom genetics to hand-crafted organic farming methods, to extracting the CBD from the hemp, to concentrating the CBD and bottling it with coconut oil to produce a line of value-added products.
Our philosophy has been to build a “fat pig” (a vertically integrated model of CBD production with tailor-made genetics, capable of generating $50,000 per acre of hemp crop), that can directly demonstrate how the model can work on behalf of farmers.
The “fat pig” vertically integrated model in a nutshell
General Operations and Procedures:
- Identify the best CBD plants on site through extensive genomic selection with proven performance through third party labs.
- Harvest, and handle hemp on site with methods that preserve the highest freshness.
- Process using ethanol-based extraction method to concentrate CBD.
- Infuse the CBD into coconut oil and jar it, using a local commercial commissary kitchen.
- Sell the CBD-infused oil in jars (along with a growing line of value added products like lotions, bath bombs, and dog treats) using a community-driven direct sales model.
The business model:
FPS is exclusively interested in organic farming, and therefore, in targeting their ultra-organic, “clean” “whole plant” product to the LOHAS market (Lifestyles of Health and Sustainability). By maintaining rigorous organic standards for the crop as well as the finished product, FPS boasts the highest quality for taste in the industry. The LOHAS sector also highly values the social impacts of their purchases and when given a choice between purchasing from farmers who need the money versus a investor group that doesn’t, LOHAS will always support the farmer. The coop model shows the direct positive impact of creating economic sustainability for family farms. Each coop member should have a current blog on the coop website so consumers can see the beneficial impacts of their purchases.
Without any marketing or sales relationships outside of word-of-mouth, FPS approached $1,000,000 in revenue in 2019.
With better organization, this figure could substantially grow. This is the very opportunity FPS hopes COF will “take over” by bringing it to its full scale and potential.
FPS is in the process of shifting to a nonprofit organization to better pursue their mission and fundraise for their projects with the help of grants. (FPS initially formed as a worker-owned cooperative from a sense of deep appreciation of the co-op model, but has since become aware why a nonprofit model is a better fit for their goals.)
FPS is anticipating expanding its own extraction and retail operations to serve the growth in farmers this year